I’ve been very busy with my practice and also with my first book being published, so I’d like to feature a guest blogger today, Rosemary Rugnetta. We found each other on Twitter. I am not endorsing the author or the company referenced; this is merely informational. If you have any questions, I suggest getting in touch with Ms. Rugnetta and/or your local reverse mortgage specialist and discuss this topic with all of your advisors, both personal and professional.
The Anxiety of Choosing a Reverse Mortgage
By Rosemary Rugnetta http://www.freerateupdate.com/author/rosemary-rugnetta/
Even under normal circumstances, mortgage transactions become an emotional roller coaster. When purchasing a home, it is the anxiety of whether or not an approval will be granted and if it is affordable. The same occurs when attempting to refinance an existing mortgage at some point in the future. Then we reach our senior years and are now faced with a house that is paid in full at the expense of a nest egg that was may not have been funded enough. The answer for many is a reverse mortgage, but the anxiety that comes with that decision keeps many from making the move.
For many seniors, the golden years have taken a turn and are not so golden. The loss of a spouse often plays a major role in the future lifestyle of the surviving spouse. The missing social security check can have an adverse affect on the remaining spouse and their way of living. In recent years, the turn in the economy put the brakes on many personal portfolios that supplemented senior incomes. Many seniors choose to stay in their homes because they are paid in full and, therefore, have a guaranteed roof over their head. That same house could also drain them of their available finances through repairs and maintenance and a slew of other things that come along with owning a home.
The fear of obtaining a reverse mortgage is often the result of not understanding how it works. Reverse mortgages that are handled by a reputable lender and obtained through FHA (Federal Housing Administration) are a safe and effective means of helping seniors. Usually no more than 50% of the equity in the home is used for the reverse mortgage which can be taken as a lump sum or put into an account to be used in emergencies. The senior borrower is not required to make any kind of mortgage payments on a reverse mortgage at any time. The U.S. Department of Housing and Urban Development (HUD) even requires that seniors have counseling prior to closing on a reserve mortgage so that the senior fully understands the details of this very important financial decision.
When contemplating a reverse mortgage, seniors often think about their heirs and the home that they would be leaving behind. Their anxiety can be calmed by knowing that the equity remaining in the home after the reverse mortgage is paid back still belongs to the heirs. Further, it is more important for the senior to take care of their own needs and their own comfort so that they can continue to live a fulfilling life without the burden of financial issues.
FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard 0.7 to 1% point origination fee.
Photos courtesy of ClipArt
There was a recent article on reverse mortgages in the NTimes that relates this article. http://www.nytimes.com/2012/04/15/realestate/mortgages-reverse-loans-at-a-younger-age.html?_r=1